Opponents Say Texas Pipeline Should Be Halted After Keystone Ruling

Several natural gas pipeline projects could be delayed by a ruling that struck down a nationwide permit for pipeline construction.

Pipe to be used in construction of the Keystone XL oil pipeline is seen at a storage yard near Saco, Montana, on March 11, 2020. (Al Nash/Bureau of Land Management via AP)

(CN) — Landowners and city governments fighting a planned $2 billion natural gas pipeline through the Texas Hill Country say the project should be halted after a federal judge’s ruling in Montana last week canceled a blanket permit for such projects across the nation.

U.S. District Judge Brian Morris ruled Wednesday that a river-crossing permit for the long-disputed Keystone XL oil pipeline was issued by the U.S. Army Corps of Engineers without first properly considering the pipeline’s local environmental impact.

The ruling canceled a so-called “nationwide permit” the Corps issued in 2017 that essentially approves any pipelines that don’t significantly impact federal waterways.

On Friday, plaintiffs in a separate lawsuit targeting the 430-mile Permian Highway Pipeline in Texas argued that the Montana ruling effectively voided an early part of the regulatory process on the Texas project.

In an amended complaint, landowners, the city of Austin and others claim a federal environmental review that allowed the pipeline to go forward is now void because the review was premised on the project’s approval under the now-canceled blanket permit.

“In Montana, the district court issued a nationwide declaration that the entire nationwide permit process is invalid, and enjoined the [U.S. Fish and Wildlife Service] from using that permit anywhere,” Lynn Blais, an attorney for the Texas pipeline opponents, said in an interview. “There’s no valid authorization anymore, because it’s been vacated on a nationwide level.”

The new claim is just one part of a broader lawsuit against Kinder Morgan Texas Pipeline LLC that accuses the company of flouting a number of federal environmental rules in a rush to finish the project.

So far, the opponents haven’t fared too well. A federal judge in Austin has twice declined to block construction on the project, though not without reservations.

In March, U.S. District Judge Robert Pitman said the opponents had failed to show federally protected warblers would suffer “irreparable harm” if the project continued. Still, Pitman expressed concern about the company violating environmental guidelines that were put in place to protect the birds during construction and prevent the spread of oak wilt, a disease that kills trees.

Kinder Morgan has insisted it is complying with all applicable rules.

“We are evaluating the amended complaint and plan to file a response at the appropriate time,” company spokesperson Katherine Hill said.

Kinder Morgan suspended construction on part of the Permian Highway Pipeline after a drilling fluid spill in late March, but other parts of the project are still moving forward.

If nothing else, the Keystone XL case could cause delays for planned pipelines across the country as legal wrangling over the Montana ruling’s applicability plays out.

The ruling blocked the Army Corps from authorizing other projects under the nationwide permit until the agency finishes a potentially lengthy review of the permitting process. Analysts expect at least two planned natural gas pipelines on the East Coast could be delayed by the ruling, according to Bloomberg Law.

“I think industry should worry about it simply because of the broad mandate,” said John Fognani, an attorney who specializes in environmental law at the Dallas-based firm Haynes and Boone.

Fognani said both energy companies and environmental groups could ask the courts for clarification on whether the Montana ruling truly applies nationwide.

“I don’t believe the judge intended for this to have a nationwide effect, but I certainly think that’s how the decision could be read,” he said. “We can all be sure that the environmental groups that are supportive of this will likely take that interpretation, the industry will take another interpretation.”

“I do expect that the ruling in our case will lead to legal challenges against other pipelines,” said Jared Margolis, an attorney with the advocacy group Center for Biological Diversity, a plaintiff in the Keystone XL case.

“The court’s ruling invalidates [the nationwide permit] until the Corps completes the required programmatic Endangered Species Act consultation, which is necessary to ensure that the cumulative effects of thousands of uses of [the permit] every year will not jeopardize species, and that could take quite some time,” Margolis said.

Texans for Natural Gas, a pro-industry group, called the Keystone XL ruling “disappointing” and said lawsuits targeting pipelines threaten the industry’s “ability to meet demand in the future.”

“We are in a tough market right now, but global demand for American oil and gas will eventually rebound, and when it does, we need to be prepared,” Elizabeth Caldwell, a spokesperson for the group, said in an email.

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